LONDON/SYDNEY, Feb 3 Kazakh miner ENRC
is considering selling all its international assets, including
its coveted copper operations in Congo, as its founders come
under increasing pressure to repay a big loan they took on to
privatize the company, industry and banking sources said.

Among the most likely buyers of the copper mines in the
Democratic Republic of Congo (DRC)- ENRC's jewel outside
Kazakhstan - are commodities trader and miner Glencore Xstrata
and its rival Trafigura, the sources said.

ENRC's three founders and the Kazakh government took the
company private last year in a $4.5 billion buyout that ended
six turbulent years as a listed company, troubled by boardroom
battles, weaker commodity prices and corruption allegations.

To finance their share of the deal, the trio of founders had
to take on a $1.7 billion loan from Russian banks VTB and
Sberbank at an interest rate of about 7-9 percent, a source with
knowledge of the situation said.

That comes on top of ENRC's own debt of about $6 billion,
most of which was used to finance acquisitions around the world
in previous years.

To keep a lid on the debt, the founders said in August they
would focus on Kazakhstan, while ENRC could divest some of its
international assets.

It was thought at the time that the company would keep the
most valuable of those: the copper assets in the DRC.

But, as the debt grew and they realised the sale of other,
less developed assets might prove complicated, the founders
decided to consider sales in Congo too, the sources said.

"They are selling all assets that are not in Kazakhstan,"
said one of the sources. "They are not going out appointing
advisors yet, but there is a strong push internally to sell.
It's most likely that they will go in this direction."

ENRC said it could not comment on the potential sale of any
assets. Trafigura and Glencore declined to comment, while VTB
and Sberbank did not return emails seeking comment.

ASSETS WITH BAGGAGE

Outside its core Kazakh ferrochrome, aluminium and iron ore
operations, the company has assets in Africa and Brazil.

Industry players said they might struggle to sell most of
them given the weak outlook for metals prices, but the DRC
copper operations, which include the large Frontier mine in
Katanga Province, already have suitors.

Frontier alone, which recently started production and can
produce about 90,000 tonnes a year of copper concentrate, could
fetch well in excess of $1 billion, industry sources estimate.

But the history of those assets may deter some.

ENRC acquired Frontier, the Lonshi mines and the Kolwezi
tailings project in a disputed 2010 deal after they were
confiscated from rival miner First Quantum.

Disagreements between the two companies over the assets were
only settled two years later with a $1.25 billion payment to
First Quantum, but the acquisition by ENRC came under scrutiny
by British authorities.

"Frontier and the other Congo assets are the most sellable,
but they have a slight problem: their history with First Quantum
and the fact that they are in Congo," another source with
knowledge of the assets said.

"People are not that keen on Congo because it is politically
unstable. The problem of buying assets there is that you might
not own them next year."

Knowledge of the country and connections could certainly
help. On this basis, Glencore Xstrata, which has been operating
in Congo for years, may have an advantage.

ENRC's iron ore project in Brazil and coal project in
Mozambique will be tougher to sell, the sources said.

The Brazilian assets, which it bought from iron ore
developer Zamin in a $1 billion deal, lacks a key port license.

The greenfield coal project in Mozambique - close to Rio
Tinto's problematic Riversdale asset that triggered a
writedown of almost $3 billion last year - is competing with
other, bigger assets for sale in the same area.

Brazilian miner Vale also plans to sell a 15 to
25 percent stake in its coal operations, which include its
projects in Mozambique.

Should ENRC decide the urgency is such that even a sale of
its Kazakh assets is plausible, then Glencore, once again, would
be the most likely buyer, the sources said.

"Glencore would love the Kazakhstan assets if they became
available. It is the natural buyer," a sector banker said.

FRANKFURT/LONDON, Dec 9 The European Central
Bank hopes its decision to confront struggling Italian bank
Monte dei Paschi at last will draw a line under a multi-year
crisis that has risked tarnishing its reputation as a credible
supervisor.

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